2nd Question Answer this question please as soon as possible. Exercise 3-5 Preparing adjusting entries (annual)-depreciation LO4

2nd Question Answer this question please as soon as possible.

Transcribed Image Text:

Exercise 3-5 Preparing adjusting entries (annual)-depreciation LO4 Mean Beans, a local coffee shop, has the following assets on January 1, 2023. Mean Beans prepares annual financial statements and has a December 31, 2023 year-end. The company's depreciation policy is to use the straight-line method to depreciate its assets. a. On January 1, 2023, purchase equipment costing $20,300 with an estimated life of five years. Mean Beans will scrap the equipment after five years for $0. b. On July 1, 2023, purchase furniture (tables and chairs) costing $13,000 with an estimated life of ten years. Mean Beans estimates that it can sell the furniture for $2,900 after ten years. c. On January 1, 2021, Mean Beans had purchased a car costing $26,500 with an estimated life of eight years. Mean Beans estimates that it can sell the car for $5,300 after eight years. Required: 1-a. For each transaction, calculate the current year's annual depreciation expense. a. Annual depreciation expense on equipment b. Annual depreciation expense on furniture c. Annual depreciation expense on car Exercise 3-5 Preparing adjusting entries (annual)-depreciation LO4 Mean Beans, a local coffee shop, has the following assets on January 1, 2023. Mean Beans prepares annual financial statements and has a December 31, 2023 year-end. The company's depreciation policy is to use the straight-line method to depreciate its assets. a. On January 1, 2023, purchase equipment costing $20,300 with an estimated life of five years. Mean Beans will scrap the equipment after five years for $0. b. On July 1, 2023, purchase furniture (tables and chairs) costing $13,000 with an estimated life of ten years. Mean Beans estimates that it can sell the furniture for $2,900 after ten years. c. On January 1, 2021, Mean Beans had purchased a car costing $26,500 with an estimated life of eight years. Mean Beans estimates that it can sell the car for $5,300 after eight years. Required: 1-a. For each transaction, calculate the current year's annual depreciation expense. a. Annual depreciation expense on equipment b. Annual depreciation expense on furniture c. Annual depreciation expense on car